Thailand - Economic sectors

Thailand's economy has grown steadily by an average of 8 percent
for the past decade. There is a wide base for growth, with each sector
contributing to the development of the economy. Starting out as an
agrarian economy, Thailand's bid for industrialization
strengthened its industry sector, while the boom in the tourism industry
strengthened the service sector. In the 1990s,

manufacturing and tourism are the 2 largest contributors to GDP.

Agriculture has been the traditional backbone of the economy, with
Thailand being ranked among the top 5 producers of food in the world. In
the 1970s, the country supplied 30 percent to 40 percent of rice in the
world market. In the 1990s, it continued to be the leading exporter of
rice, tapioca, and frozen shrimp. It is also the world's largest
producer of rubber, the demand for which has increased due to the AIDS
epidemic, which has increased the demand for condoms. Thailand is also
one of

the world's biggest suppliers of flowers, particularly orchids,
which it exports mainly to Japan and Europe. Despite its output, the
agricultural sector is on the decline, and is slowly being overtaken by
the industry and service sectors in terms of contribution to GDP.

With the re-orientation of production from import substitution to
producing for export, and the drive towards industrialization, the
manufacturing industry grew steadily until it exceeded agriculture in
terms of contribution to GDP. According to Bank of Thailand statistics
reflected in the 2000 Business Monitor International Annual Report, the
manufacturing industry accounted for 86.8 percent of the
country's total exports in 1999. The country's first step
into manufacturing was food processing, effectively building on its
strong agricultural sector. Today, it is the world's largest
exporter of canned pineapple, with one-third of all the canned pineapple
sold in the United States coming from Thailand. It is also Asia's
biggest exporter of tuna after Unicord, a local company, purchased
Bumble Bee Seafoods, the third largest tuna canner in the United States.
It now supplies 20 percent of the world market for canned tuna.

The country's service sector is experiencing steady growth, with
the boom in the tourism industry. In 1992, tourism accounted for 10
percent of the GDP, with 600 tourists arriving every hour, or 5,256,000
tourists for the year, spending an average of US$1,000 each, equivalent
to about US$5 billion a year. This amount is equal to 50 percent of the
country's total exports. In 2000, revenues from tourism were
expected to hit 343 billion baht or US$6.86 billion, with a total of
9,438,000 tourists expected to visit the country throughout the year.

Strong local corporations—such as Charoen Pokp-hand, which earns
revenue of US$2.5 billion annually; Thai Union Frozen Products, the
largest canned seafood exporter; and Boonrawd Brewery—work
together with various
multinational corporations
to energize the manufacturing industry. Forecasts for the year 2000
predicted that multinational corporations which have set up shop in the
country—such as Mitsubishi, Isuzu, and Honda for automobiles;
Fujitsu, Seagate, IBM, Sony, and Matsushita Electronic for electronics;
Heineken and Carlsberg breweries, and Nestle and Kellogg for food
processing; and Exxon, Montell, and Bayer for petrochemicals—will
expand their operations in the country and pump in more investment.